The head gasket is the most highly stressed seal in an engine. Clamped between the cast-iron engine block and the aluminum cylinder head, it must seal three systems. It seals the combustion chambers (under 1000+ PSI pressure), the high-pressure oil galleys, and the low-pressure coolant passages. Modern gaskets are made of multi-layered steel (MLS) coated with rubber to handle these extreme pressures and temperatures.
If the engine overheats, the aluminum cylinder head expands faster than the block, warps, and crushes the gasket. This leads to a "blown head gasket." Coolant leaks into the oil, forming a milky-brown sludge, or leaks into the cylinders, producing white sweet-smelling smoke from the tailpipe. A blown gasket kills cylinder compression, causing engine stalls.